Wednesday, November 26, 2008

Obama picks Volcker to lead committee

Former Fed chairman Paul Volcker has been selected by President-elect Barack Obama to lead a new White House economic advisory committee.

New York Times has the details:

"Mr. Obama made the announcement at his third news conference in three days. The public appearances by the president-elect are intended to show Americans that his team is focusing on resolving the financial crisis, which Mr. Obama said Wednesday demands “fresh thinking and bold new ideas from the leading minds across America.”

Mr. Volcker, 81, has been providing Mr. Obama with advice on the economy for months. After briefly considering him for Treasury secretary, Mr. Obama instead asked Mr. Volcker to lead the President’s Economic Recovery Advisory Board, a new panel to be comprised of leading figurees als from a variety of business sectors. The group is supposed to advise Mr. Obama on how to jump-start the economy and stabilize the financial markets...

Mr. Volcker became chairman of the Federal Reserve in August 1979 as President Jimmy Carter was fighting to rein in the inflation caused by the oil shocks of 1973 and 1978. Mr. Volcker, who led the Fed until 1987, often used tactics that were unpopular, like rapid increases in interest rates. Criticized at the time for causing a recession, Mr. Volcker was later praised for the effectiveness of his efforts."

The appointment of Volcker to head this committe will be seen as a smart move on Obama's part, especially by those who favorably recall Volcker's efforts to wring excess inflation from the US economy in the early 1980s.

Some, like Marc Faber, might even say that Obama should go one step further and try to appoint Paul Volcker as the new Federal Reserve chairman!

Related articles and posts:

1. Discussion on the economic crisis with Paul Volcker - Charlie Rose.


Jason said...

What is wrong with giving the American household a check for $13,000? The $13,000 would do much better in the people’s hands. The $13,000 is less than the government is spending on the original bailout and the new proposed $800 billion. If an economic advisory board cannot put the people before their selfish reasons something is very wrong. If the people had the money they would spend it and then jobs would be added, manufacturing would grow, and last but not least the states would gain money in the form of sales taxes not to mention the added income taxes from the extra workers.

David said...

Hi, Jason,

Thanks for your comment.

The idea sounds great, but where is the money coming from to send each American household a stimulus check for $13,000 or any other amount?

The government has no funds of its own, so the money for any of these programs is coming right out of the people's pockets, via direct taxes, future debts, and/or the ravaging effects of inflation.

I agree with your basic premise: that it would be better for individuals to reserve the right to judge how best to use their own funds.

Wouldn't it be great if the people held their government to account on this issue?

Anonymous said...

Jason, be careful what u ask for.
Most stooges would take a vacation to italia with tree meelionay lira and lease an escalade with the 13k.